Consumers who are experienced with the Internet are continuing to show a growing preference for both receiving and paying bills via the Internet, according to the results of a recent study of online consumer bill-paying habits. The study, conducted by NFO Research for the Production Mail and Document Factory Solutions Division of Pitney Bowes, shows a growing awareness on the part of online consumers of the benefits of Internet billing and an increasing desire to use the Internet to receive and pay bills covering a wide variety of business transactions. In fact, the study confirms what many e-commerce observers have come to believe � that the time is ripe for meaningful growth in Internet billing.
More experience, more comfortable
Why is it such a good time for e.billing? Because consumers are ready. Many online consumers now have several years of experience using the Internet for email communications, research and shopping and paying for products and services via credit card.
These consumers are increasingly comfortable with the security of Internet-related business transactions and are showing a greater willingness to receive bills online from regular business partners and to authorize direct payment via the Internet. The NFO research also supports the findings of another recent study conducted by Jupiter Research, which shows the number of consumers using the Internet to receive and pay bills is expected to reach 18 million � or 10 times the current number � in just three years.
Not surprisingly, the vast majority of online households responding to the NFO Research survey reported that mail is still the most widely used method for receiving and paying bills. Specifically, 85% of respondents reported using mail for bill receipt and payment. However, online households are increasingly cognizant of the many benefits of online billing, such as speed and convenience, and indicate a willingness to shift to that method of payment. Nearly a third of respondents said they preferred to receive their bills in an electronic manner. And of those who preferred electronic receipt, more than 50% said they would prefer to pay their bills electronically, too.
Online consumers value speed and convenience
It�s pretty clear that given a choice, online consumers don�t want to waste time opening and sorting bills, writing checks and then stuffing and stamping envelopes each month. Those attitudes came through clearly when respondents were asked if they would find it beneficial to receive and pay bills online. Nearly 75% of respondents indicated that they
recognize the benefits of digital delivery and said they would find it beneficial to receive bills in a manner other than the mail. Even more significant, an astonishing 95% of respondents reported they would find it beneficial to both receive and pay bills via the same electronic method.
When asked about the types of bills they would most like to receive and pay online, respondents indicated a clear preference for the recurring monthly payments related to telephone, electricity, gas, cable TV service, insurance protection and credit cards.
Interestingly, more than half of consumers who prefer the Internet as the means of digital bill delivery said they prefer using a biller�s home page, with another quarter preferring the services of a consolidator. It�s not clear, however, if the online households� preferences for using a biller�s home page are due to familiarity with the biller or to a perception of superior service and value.
Biller direct vs. consolidator
When asked about the convenience of consolidating bills, the vast majority of respondents � nearly seven out of 10 � said they would find it valuable to consolidate billing. That�s substantially more than indicated a preference for receiving bills though the biller�s home page. Why the difference? It may be that online consumers are not yet familiar with the services of consolidators or that their particular bills are not yet being consolidated.
So mailers may want to consider the relative advantages of the two models before deciding on a single approach. The biller direct model may have an initial advantage in
attracting online consumers due to their familiarity with the biller�s home page. However, the consolidation approach may have a longer term advantage due to the added convenience it potentially offers consumers.
The keys to success in Internet billing are leverage, choice and ease of use, according to Karl Schumacher, vice president of Document Factory Solutions for Pitney Bowes. �Mailers should consider leveraging their existing investment in legacy-based, statement-generating applications � instead of investing a huge sum in a new or duplicate capability that may be underutilized � so they can continue to serve their traditional paper-based customers while they meet the emerging preference for an electronic billing option.
�Mailers can also minimize any upfront capital costs by utilizing a service bureau format, which enables mailers to offer an electronic billing option quickly and at a fraction of the ongoing unit cost of processing traditional, paper-based mail.�
As for choice, the biller direct and consolidation model should be viewed as �complementary capabilities, not exclusionary options,� according to Schumacher. �One or the other or both can be utilized,� he adds. �The real danger comes from delay. Debating delivery models merely gives more nimble competitors time to take action and gain an edge.�
Additionally, high-volume mailers that distribute statements only � such as trade confirmations from brokerage firms or statements confirming investments in 40l(k) plans or mutual funds � can still utilize electronic delivery but without a payment capability. The benefit? They respond to the growing consumer preference for faster delivery and easier handling.
And, of course, convenience must be king. Every aspect of the digital service � from enrolling online, to distinguishing between the receipt of statements only, to the capability to both receive bills and make payments, to actually authorizing payment � should be easy for consumers to implement.